A New Way to Max Out Your Employer Match

Also: Why Striking Workers Are Pushing to Get Pensions Back

͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌  No images? Click here January 24, 2024 Last year didn’t exactly end on a high note for student loan borrowers. After a more than three-year pause on federal student loan repayment and interest, borrowers had to resume forking over their money to lenders again last fall. The transition wasn’t easy: The Department of Education recently reported that 40% of borrowers missed the due date for their first monthly bill. (Which is pretty much what experts predicted would happen shortly before the payment pause ended.) Borrowers struggling to pay back their student loan debt don’t have much room, if any, to save for retirement. In another 2023 report, this one from Fidelity, 84% of student loan borrowers said that their debt impacts their ability to put away money for the future. What’s more, the report found that roughly 30% of borrowers eligible to participate in a workplace retirement plan aren’t contributing. That could change for some borrowers in 2024 thanks to new retirement benefits made possible by the SECURE 2.0 Act. Companies now have the option to count student loan payments as “elective deferrals,” and make matching contributions to eligible workers’ defined contribution plans. In other words, many employees can now save for retirement — via their company’s match benefit — simply by paying their education debt on time. Unlike certain SECURE 2.0 provisions that kick in this year, the student loan savings match is optional, so companies must choose to incorporate it into their benefits. It’s hard to say just how widely the benefit will be implemented, but Kevin Gaston, director of plan design consulting for the fintech company Vestwell,  expects industries that require more education — like  health care and legal professions — to have higher adoption rates. “In a world where we see the average tenure of employees continuing to [decline] … this is not an expensive way to get more folks to stick around, and stick around longer,” he says. Gaston encourages employees — regardless of their industry — to reach out to their HR departments and advocate for the student loan savings match to be added to their company’s benefits package. “There’s an amazing moment here [for] employees,” he says. “This is their chance to make up for lost time.” — Mary Ellen Cagnassola, Money reporter P.S. If you got this newsletter from a friend, sign up here for email delivery to make sure you don't miss the next issue.

Retirement Stat of the Week: ½

A recent report from the Center for Retirement Research at Boston College found that at any given time, roughly half of private sector workers aren’t covered by a workplace retirement plan. Small companies, which the report defines as having fewer than 100 employees, are mostly to blame for this disparity in coverage.

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Retirement 1, 2, 3

What’s the best time to retire? With life expectancy increasing, a story from the New York Times reexamines the age-old question. A new Tedx talk from Uliana Shchelgacheva, the co-founder of the social enterprise startup Longevity Hub, reframes retirement as a gradual journey. Retirement columnist Liz Weston explains why planning her own retirement was harder than she expected.

More Insights and Advice from Money

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retirement This Surprise Expense Is Likely to Upend Your Budget in Retirement (Hint: It's Not Health Care) Given that most people retire around the age when medical issues begin to stack up, you may fear that the cost of health care will eat into your retirement savings. READ MORE Money; Getty Images

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personal finance This Money Checklist Will Help You Crush 2024 When Americans retire, Social Security benefits help bolster their income — and every year, the government gives the roughly 70 million recipients of those benefits a raise to bring their payments up to speed with inflation. READ MORE Rangely García for Money

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